The move means that the gothic thriller won't be in Oscar contention for this year. Paramount has spent heavily already marketing its summer movie hits "Star Trek," "Transformers: Revenge of the Fallen" and "G.I. Joe: The Rise of Cobra" and didn't want to shell out another $100 million on advertising and prints this year, especially when it has two other releases -- "The Lovely Bones" and "Up in the Air" -- that it will also be pushing for Oscar consideration. The best picture category for the Oscars has been expanded to 10 starting next year, but apparently Paramount needs one that goes to 11.

Still, the decision is not without risk. Scorsese was told earlier this week that this was being considered and if it ends up backfiring on the studio, it could strain the director's relationship
and deal with Paramount Pictures and its chairman, Brad Grey. The move was first reported by Deadline Hollywood Daily.

"Our 2009 slate was green-lit in a very different economic climate and as a result we must remain flexible and willing to recalibrate and adapt to a changing environment," said Grey in a statement.

"Shutter Island" is an adaptation of a Dennis Lehane novel about two investigators who probe the escape of a female mental patient and get trapped on the island that houses the institution.